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A year ago at this time I was happy to share how 2014 had been, by far, the best year in the history of the firm. We had opened 3 new branch offices, expanded our team to almost 70 agents, and set records for sales production. It would be a tough act to follow.
Our New Putnam Market Center location, opening January 2016
2015 did not see us open any new offices (although one is in the process of relocating to better digs), and our roster still has not cracked 70 agents.
But what we did do was significant.
I am ecstatic to report that our closed transaction total skyrocketed from 110 in 2014 to 175 in 2015, and our closed dollar volume went from $34 million to $54 million. That is a 59% increase in closed transactions for our clients and a 59% increase in closed dollar volume.
59%.
2015 also saw 14 of our professional team exceed $1 million in personal sales. Prior to this year, we never had more than 7 million dollar producers.
Overall, out of over 1000 firms in our marketplace, J Philip Real Estate ranked 33rd in closed transactions. Moreover, no Westchester or Putnam based independent firm outsold us. We are no longer a mom and pop or boutique. We are a growing, medium sized independent that is gaining market share month by month. For me as the broker, 2015 was about managing the growth, training, implementing better systems and giving my team the best tools possible to serve the clients. This caused some growing pains and technological challenges, but overall I am immensely proud of the commitment, agility and focus that the J. Philip family of producers demonstrated.
Typically, I have a shout out to the award winners among our ranks, but this year’s annual party is January 14th, so I’ll release that list in two weeks. Suffice to say we had some fantastic achievements by our associates in 2015.
Personally, I sold over $11.4 million worth of property, a $2.5 million increase over 2014, and I was selected as Realtor of the Year by the Revamp organization, a local concern committed to agent education. I made my share of media appearances, including a radio interview on WFAS on the “Real Estate RIValution” program. My travel schedule was intense at times, as I was still active on the Hudson Gateway MLS executive board, the Zillow Agent Advisory Board, and I bopped between 4 offices (including a very productive trip to Buffalo in the summer).
Going into 2016, we have close to 80 transactions under contract as I type this. I have hired two specialized consultants to assist me in managing our growth properly, for the best interests of our growing clientèle and to give our agents the best resources possible to do their jobs with excellence. I have every reason to believe that we can do 250 transactions in 2016, and exceed $100 million in closed sales volume. For the first time ever, I will institute an active campaign to attract more and better professionals to join our firm. I have set a few other goals, some of which will be revealed on these very pages going forward, and among them will be to improve our value to the consumer; I want our clients to have the very best professional experience possible. Looking at the team of amazing people in this brokerage, I feel very good about that happening.
The SWOT of the 2016 Real Estate Industry
I shared the stage with some considerable brain power. It would be difficult to summarize all the answers from each of the participants, but I’ll share my own answers to the question.
Strength: The industry’s best asset is the political clout it wields, chiefly through RPAC but also at the state and local level to preserve consumer interests in real property ownership. The real estate industry has successfully supported the preservation of the mortgage interest tax deduction, kept the banking industry out of the brokerage business, and very recently supported the extension of the mortgage forgiveness debt relief act. There are cynics who would state that the industry’s political strength is chiefly for self preservation, but an honest investigation would yield an overwhelming help to consumers. That is, of course, unless you think that the largest transaction of your life is safe to have as a do it yourself project.
Weakness: I answered this question with a question: In what industry can a person be hired for a position, not produce for 6 months or more, and still keep their job? This is where brokers are their own worst enemy. In their zeal to fill their rosters with bodies in the mistaken belief that more people equals more transactions, brokers have developed an unwitting fetish for dead wood. As snappy as the line was, it is true. Brokers have abrogated being leaders for their troupes in technology, training and accountability and instead become cheerleaders. The result is a vast, inconsistent range in professionalism that consumers do not recognize until it is, unfortunately all too often, too late to do anything about it.
Opportunity: This could be restated as our biggest headache, but I see the industry’s biggest opportunity as educating the public as to what we actually do for them. A good real estate agent isn’t a glorified door unlocker who sucks a percentage of profit out of a transaction due to their superior cartel position from an unsuspecting public. A good agent is an advocate for a consumer in what is typically not only the largest transaction of most lives, but also a complicated, multi-layered process that has the competing interests of lenders, lawyers, title companies (and often municipalities) and principals operating in separate ecosystems with both statutory and industrial roadblocks to congruency or streamlining the red tape. We negotiate, we interpret data, we provide local knowledge, and we know what questions to ask, and that is the tip of the iceberg. Of the hundreds of distressed property transactions I have closed, almost all were either under-brokered or un-brokered prior to my client hiring me. Consumers needs brokers in a transaction, and smart consumers hire a good broker early.
Threat: Contrary to popular sentiment in the industry, I don’t view portals like Zillow or Trulia a threat, nor do I consider “disruptive” technologies or alternate business models a huge danger. The biggest threat to the real estate industry, by far in my view, is the big banking lobby. Real estate is too agile and adaptive to be replaced by a website or new technology; our embrace and utilization of the Internet is a good example of this. The example of travel agents being put out of business by travel websites is a common example of what I see as a red herring. The same Internet that killed my travel agent built my company. But we are vulnerable to being legislated into obscurity, to the detriment of the consumer.
Rather than the travel agent example, we should look at what happened to mortgage brokers. Banks couldn’t beat brokers in the marketplace, so when the crash hit, they used the crisis to back legislation that outlawed how mortgage brokers made money: they outlawed the yield spread premium. Banks want to get into brokerage. Badly. They already have their hands in insurance and securities. And they have a powerful lobby. We are vulnerable to backdoor legislation that could affect how we earn our income, and marginalize us the same way that mortgage brokers were sent into obscurity almost overnight. Ironically, mortgage brokers didn’t cause the crash. They simply didn’t have the resources to fend off an opportunistic attack from their competitors in the halls of government.
“If you can’t beat them in the marketplace, disqualify them in court.” It’s the American way, right? The takeaway here is for our industry to stop wringing our hands about the portal and tech bogey men, roll up our sleeves, and do good professional work.